Productivity falls in spring, labor costs rise

WASHINGTON (AP) ? Worker productivity fell this spring at a faster pace than previously estimated while labor costs were rising at a faster clip. Both developments could pose threats to a fragile economic recovery.

Productivity declined at an annual rate of 0.7 percent in the April-June period, a bigger drop than the 0.3 percent decline reported a month ago. Labor costs rose at an annual rate of 3.3 percent, faster than the 2.4 percent increase originally reported.

The changes reflected downward revisions made last week to overall economic growth which showed the economy’s output barely growing in the spring. Declining productivity, if it persists for a prolonged period, would represent a serious economic threat while rising labor costs would cut into corporate profits.